When an entity that has purchased a primary insurance policy wishes to insure against risks that may exceed the limits of its primary (or underlying) insurance policy, the entity may look to purchase excess insurance. Thus, the purpose of an excess insurance policy is to cover an insured in the event that the insured incurs liability that is in excess of the coverage limits of its primary insurance policy. Typically, one or more layers of excess insurance policies may be used to supplement a particular primary insurance policy. For example, an insured may purchase a primary insurance policy with a coverage limit of $10 million, a first excess insurance policy which would cover losses in excess of $10 million up to a further limit of $20 million, and a second excess policy which would cover losses in excess of $20 million up to a further limit of $30 million. The first excess insurance policy is said to have an "attachment point" of $10 million, because the coverage offered by the policy will not be invoked unless the insured's liability exceeds $10 million. Similarly, the second excess insurance policy has an "attachment point" of $20 million, because the coverage offered by that policy will not be invoked unless the insured's liability exceeds $20 million. When there are multiple excess insurance policies, each of the policies will typically be written by a different insurance company, and will be reinsured through other insurance companies.
Companies often purchase excess insurance to cover losses for remote events that may not occur for many years into the future. For example, a drug company may purchase such insurance to cover unknown adverse effects which may only manifest themselves in a patient many years after the patient has taken the drug company's product. Since excess policies involve risks that may be 20-30 years into the future, it is important for all relevant information pertaining to the excess policy to be properly documented and permanently stored at the time that the policy is initially issued.
Insurance companies that write excess insurance often receive submissions through licensed insurance wholesalers, brokers and retail producers. When such an insurance business producer wishes to compete for an excess policy, it is important for the insurance company to be able to provide the business producer with a quote which accurately reflects the characteristics of the risk, and, if necessary, to audit any information provided by the business producer before any quote is issued.
It is therefore an object of the present invention to provide a system for quoting, binding and later issuing an excess insurance contract in which all relevant information pertaining to the risk is properly documented and permanently stored.
It is a further object of the present invention to provide a system for quoting excess insurance which requires the quoted premium to accurately reflect the risks associated with a policy, and which permits the auditing of the risk characteristics, rating and pricing methodology associated with a quote before it is issued.
These and other objects and advantages of the invention will become more fully apparent from the description and claims which follow or may be learned by the practice of the invention.